Check in Device Manager (or the device's properties in explorer) to see what it says under DVD Region. Although your device is region free, the DRM involved may require a specific region to be chosen, so you may want to try selecting Region 1 (if it isn't already) and see if that helps. It's not an ideal solution, but you could play other regions with PowerDVD.
There is no Region to check/set, like in XP, just General, Volumes, Driver, Details.
Strange thing is, PowerDVD plays them all, without any problem, but I like the Media Center, which plays region free dvd's just fine...